In August, the economic picture changed little for Coos County. Coos Index fell for the third month in a row on a monthly year-over-year basis. Three out of four available component indicators fell on a monthly year-over-year basis. The hospitality sector remained as the only bright spot; estimated rooms and meals revenue remained up from the prior year. However, the storyline remained little changed for the rest of the economy. The labor market continued to struggle; both indicators – the number of employed residents and estimated wages and salaries – were down from prior year. The manufacturing activity remained sluggish; industrial electricity sales dropped three straight months on a monthly year-over-year basis. August data for average Saturday traffic counts has yet to be released by the New Hampshire Department of Transportation. So the Indexes were constructed assuming no change from July in the variable.

The State economy fared better in August than in recent months. The pace of increases in the State Index stopped declining after falling four months in a row. The rebounding hospitality sector offset the slowing the manufacturing activity. The hospitality sector exhibited a strong comeback; estimated rooms and meals revenues grew at increasingly faster rates on a monthly year-over-year basis since May when its growth nearly came to a halt. The picture in the labor market was mixed; the monthly year-over-year growth of employed residents slowed to a crawl, while that of estimated wages and salaries remained strong. These two indicators track different segments of the labor market. The latter represents total compensation paid by the employers that are covered under the federal and state unemployment insurance laws. Changes in wages are due largely to fluctuations in employment. However, the data excludes the self-employed, domestic help, proprietors, all of which are tracked by the number of employed residents. The conflicting reports, therefore, may reflect struggles in many small businesses rather than larger firms.

The real estate market analysis can be found at the end of this report.

Recovery may be slipping away.

This month’s report reflects some major revisions to the data. Models – constructed to estimate the current values of rooms and meals revenues, and wages and salaries – were revised to increase accuracy. In addition, industrial electricity sales series for Coos County has been corrected by data provider. Unfortunately, these revisions helped heighten concerns that recovery might be slipping away. The stumbling housing market remained a major obstacle for recovery. The labor market showed no signs of improvement either. However, the hospitality industry remained strong as warm weather continued to draw tourists to the region. The estimated rooms and meals revenues and the average Saturday vehicle traffic both stayed up from where they were a year ago. The county’s production activity chugged along, as well. Industrial electricity sales remained up from where it was a year ago, but there were signs that it too had been slowing down.

The State Index fell below where it stood a year ago for the first time since March after steady declines in recent months. The stagnant labor market and the stumbling housing sector largely contributed to this fall. The hospitality sector struggled as well, despite the warm weather. The estimated rooms and meals revenues and the average Saturday vehicle traffic both fell from the July’s level. On a more positive note, the manufacturing industry chugged along, as reflected in a continued upward trend in industrial electricity sales.